Wednesday, February 13, 2008

Social Media versus Search

More from TFM&A.

The effectiveness of advertising travel products on social network sites is still up for discussion – users are coming to the sites to interact, not transact.

Enter stage left Blake Chandlee, UK commercial director for Facebook, keynoting to an eager audience.

[Not that Facebook is a social network site, by the way – "it's a utility to help members manage their relationships, a social media platform", apparently]

Chandlee bigged not only Facebook but the social media(utility) sector generally.

Live demos of products and scary growth charts galore, but things got really interesting in the Q&A when a figure from the back mentioned the m-word – monetisation.

The banner ads on Facebook, sold through Microsoft, we know about, but Chandlee introduced a different revenue stream – targeted ads within a member's profile.

"We want to integrate ads into the conversation," he says.

He pulled up his own profile on screen, which featured a video ad for a film which had been mentioned by a friend who had added a review of the movie to her own page.

The connection is obvious – less so the return on investment for these ads, which are to be sold on a CPM basis. If a friend tells me about a great holiday they've had in New York, an ad for New York might appear.

Earlier, Chandlee mentioned that social media was changing the dynamics of search – suggesting that members are starting to ask their "social graph" for travel inspiration rather than Google.

If this trend develops, and Facebook can offer travel suppliers genuinely targeted ads, could social media sites start to steal some of search's fire?

Co-incidentally, I picked up a copy of a magazine called Brand Management just after Chandlee's session which included a Q&A with Lastminute.com's chief marketing officer Simon Thompson. "PPC annual cost inflation within the travel category is now close to outrageous," he says.

So will targeted ads within social media sites exploit concerns over the cost of PPC?

Chandlee kept referring to Facebook's 23-year-old founder Mark Zuckerburg as a visionary.

Visionary enough to threaten search's dominance on online marketing spend? Not so sure...

Martin Cowen, chief writer, Travolution

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5 comments:

Anonymous said...

Facebook`s impact on the tourism industry. Many organizations are now using Facebook to communicate with specific clienteles.
More at:
http://marketing2tourism.wordpress.com/2008/01/13/facebooks-impact-on-the-tourism-industry/

Joe Buhler said...

Social media as an effective marketing tool and alternative to search is a much debated subject. The jury is out on it but early results on monetization are disappointing.

In my opinion, there are two key differences in this context: When I'm searching for something and a Google ad pops-up that's relevant to that search I'm much more likely to click on it and then convert. When I'm interacting on my social networking site I'm far less likely to be receptive to any ads, even if they might some how relate to a subject of interest. I'm not in a buying mode.

The fact that I'm not expecting to be sold when I'm interacting with my social network makes it old fashioned interruption marketing which has been ineffective now for years.

This doesn't mean that companies can't use social media to market but it needs to be in a different form than ads and much more subtle to be effective. It's more comparable to sponsorships or product placements.

How this will affect the income stream of all those who bank on being able to generate ad revenue to survive remains to be seen.

Joe Buhler said...

Here's a follow-up to my previous post, with a quote in today's Wall Street Journal.com relevant to the issue:

....but for all that, there are signs they (social media sites) are yielding advertising revenue slower than some Internet companies had hoped. News Corp. executives recently expressed satisfaction with revenue growth at MySpace's parent division. But Google, which sells advertising on MySpace.com, has hinted at dissatisfaction with the arrangement. "We have had a challenge with social networking inventory as a whole and some of the monetization work we were doing there didn't pan out as well as we had hoped," Google co-founder Sergey Brin recently told analysts.

Darren Cronian said...

I wonder how much traffic STA or Lonely planet receive from Facebook through their groups?

I'm not convinced that FB is a good marketing tool as some may make out.

There's no doubt it's got massive potential but I think we forget that the likes of Facebook are there for members to communicate and interact with friends, family etc, and not there to buy a product or service.

Darren said...

Sorry to add;

I think the large travel brands are going to generate more interest in their groups and probably therefore have a better chance of getting something out of FB/MySpace, compared to small travel companies.